Fortum calls for an ambitious EU climate strategy to reach carbon neutrality by 2050
The EU should align its long-term climate ambition with the Paris Agreement with the view of being carbon neutral by 2050. In practice, this means achieving a balance between greenhouse gas (GHG) emissions and carbon sinks.
Fortum welcomes the Commission’s initiative to publish a long-term decarbonisation strategy in November. It lays the grounds for ambitious targets and a policy framework towards cost-efficient decarbonisation by 2050. A stable, visionary and long-term political framework for the economy is a prerequisite for European business investing in low-carbon technologies to remain competitive in the global market.
In order to reach carbon neutrality, it will not be enough to abate GHG emissions from various sectors; different technologies to absorb carbon dioxide (CO2) directly from the air or from flue gases will also be needed. In order to make these technologies commercially viable, the EU should develop a market mechanism to reward the removal of CO2 and dedicate an integrated part of its EU research and innovation programme to these technologies.
In Fortum’s view, carbon pricing will be the key for reaching carbon neutrality. Despite the positive development of the EU ETS during the past year, the system needs to be further strengthened in the upcoming reviews in the early 2020’s.
Fortum believes that electrification – both direct and indirect – of many sectors will be an enabler for decarbonisation. However, electrification only makes sense if the electricity supplied comes from low-carbon energy sources. Although the European electricity sector is undergoing a major transformation, it is still facing challenges to decarbonise. Fortum’s own electricity production portfolio in the EU is already highly decarbonised: in 2017, 96% of electricity production was CO2-free.
In its response to the Commission’s public consultation on the EU strategy for long-term GHG reductions Fortum also takes a stance on biomass, which is an important energy source especially in the Nordic countries. Forests have to be considered primarily as resources for bio-based products and as a carbon sink. Fortum prefers using biomass for high-value bio-based materials and using reject biomass as a transitional energy source for electricity and heat. As one of the latest efforts for more resource-efficient use of biomass, Fortum announced in May 2018 an investment in a new biorefinery in Assam, India.